Consumers in February take advantage of the close-out sale at the American TV & Appliance store in Oak Creek.

Steinhafels Inc. is buying three of the former American TV & Appliance stores out of receivership and will add them to its chain of furniture stores.

A Dane County judge on Monday approved Steinhafels' $12.75 million bid for the stores in Oak Creek, Appleton and on Madison's east side.

The locations will be converted to Steinhafels furniture stores as early as this fall, President Gary Steinhafel said.

"We intend to completely gut and remodel both the interior and exterior of the stores," he said after Monday's Madison court hearing.

Pewaukee-based and locally owned Steinhafels already has a major presence in Wisconsin, with eight large furniture stores and nine smaller mattress stores here and in northern Illinois.

The former American TV stores in Pewaukee and Brown Deer, meanwhile, are being purchased by real estate investor John Schlueter. His $7.25 million bid for those stores, as well as 19 acres of vacant land in Oak Creek, also was approved Monday.

Schlueter said his company, Frontline Commercial Real Estate LLC, already has launched discussions with prospective tenants. The former stores in Pewaukee and Brown Deer have good visibility to passing motorists and are attractive for new retail use, he said.

Schlueter formerly was president of Karl's Event Services in Oak Creek. That business, founded by his father, was sold last year to Arena Group, a British company.

The deals approved Monday between Steinhafels, Schlueter and court-appointed receiver Michael Polsky bode well for creditors of American.

The 60-year-old retailer of electronics, furniture and appliances became a household name in the 1970s and '80s. Its wacky advertisements dangled free bicycles before potential customers, with then-owner Len Mattioli, better known as "Crazy TV Lenny," breathlessly urging them to "Buy a TV, get a bike! Buy a washer, get a bike! Buy (fill in blank), get a bike!"

But Mattioli sold his stake in American over a decade ago, and the chain stumbled amid rising competition and economic tumult.

American filed for receivership, a procedure similar to bankruptcy, in February, listing debts of almost $55 million.

There appears to be a good chance that those debts will be paid off.

Polsky said in court Monday that a third buyer has contracted to purchase the three remaining American-owned stores for $12 million. If that deal goes through, "along with certain other recoveries and certain other assumptions," enough money will be generated to pay all or almost all of the claims, Polsky said.

At least some of American's nearly 700 Wisconsin employees, meanwhile, stand to land jobs with Steinhafels. Polsky said the furniture retailer plans to hire many of the people who worked at the American stores it is buying.

Gravois Bluff LLC, a St. Louis firm with a $500,000 claim against American, had objected to the sales to Steinhafels and Schlueter's firm.

Gravois Bluff said it wasn't sure the deals were in the best interests of creditors, and argued that it should have a chance to interview American CEO Doug Reuhl to make sure no sweetheart deals were cut.

There were no such agreements, Polsky said. And Dane County Circuit Judge Rhonda Lanford agreed with his assessment that the offers were "fair and reasonable and in the best interests of all creditors and parties-in-interest of American TV."

Mattioli, who has been critical of how American was run after he left, also had initially objected to the proposed sales to Steinhafels and Schlueter, but later dropped his objection.

About Paul Gores

About Rick Romell

Rick Romell covers general business news and retail. He has won or been runner-up for national awards for business feature writing, coverage of Milwaukee's economic future, the personal toll exacted by job loss, the impact of Chinese manufacturing on Wisconsin, and the discovery of chronic wasting disease in the state's deer herd.